Question

What is a top-up premium?

a.

The initial premium paid at the inception of the policy

b.

An additional premium paid irregularly over and above the contractual basic premiums

c.

A premium paid for switching between different investment funds

d.

The premium paid for availing rider benefits

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).An additional premium paid irregularly over and above the contractual basic premiums Explanation:Top-up premium refers to an additional amount of premium paid, if any, over and above the contractual basic premiums stipulated in the terms and conditions, at irregular intervals during the period of the contract.

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